SBD/May 4, 2012/Marketing and Sponsorship

Floyd Mayweather Rakes In Money With Unique Business Model

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Mayweather pays GBP a promotional flat fee, then collects 100% of event revenues
Boxer Floyd Mayweather Jr. puts his perfect 42-0 record on the line Saturday night against Miguel Cotto, and when Mayweather “headlines a pay-per-view event he not only reaps the profits but covers the expenses,” including Cotto’s estimated $10M payout, according to Morgan Campbell of the TORONTO STAR. It is a “high risk formula in which Mayweather trades guaranteed purses for back-end paydays.” Mayweather earned about $40M for his last fight, and he "figures to net even more against Cotto.” Mayweather Promotions CEO Leonard Ellerbe said, “It took years of planning and strategizing. Floyd has the only business model in sports where he keeps 100 per cent of the money. We changed the paradigm when it comes to the way revenue is generated and distributed.” Campbell noted Mayweather subcontracts promotional duties to Golden Boy Promotions, but after “paying them a flat fee, all revenues associated with the event -- ticket sales, concessions, sponsorships, international rights and more -- funnel through Mayweather’s company.” His last three bouts “have totaled 3.65 million pay-per-view buys and $205.7 million in pay per view revenue in the U.S.” However, while Mayweather’s “villain persona helps his profile, it hurts his endorsement portfolio.” Mayweather ranked 49th in Bloomberg’s Power 100 listEND, which ranks athletes’ marketability and popularity. Boxer Manny Pacquiao ranked 28th. Ellerbe “stresses that the money Mayweather makes promoting himself more than outweighs any endorsement cash he’s lost.” Ellerbe: “If you’re able to generate a substantial amount of revenue in the ring, what difference does it make? If Mayweather can make $85-90 million in a 12-month time frame, who cares if he’s getting endorsements or not? Who cares?" (TORONTO STAR, 5/3).

HELPING OUT GOLDEN GLOVES: In Grand Rapids, David Mayo reported Mayweather "donated $40,000 to the National Golden Gloves Tournament of Champions” and also “committed to cover the entire cost of the National Junior Golden Gloves.” Ellerbe said that the “entire financial commitment is difficult to pinpoint but would fall in the low six figures” (MLIVE.com, 5/2).
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